Microsoft licensing changes: how to prepare for additional price hikes
Microsoft licensing changes: how to prepare for additional price hikes
Just over a month since their latest pricing change, Microsoft is back with additional price hikes - here are some actions you can take.
Published on 17th December 2025
Just over a month after the last pricing change, Microsoft is rolling out another set of significant updates to its licensing structure—changes that will impact IT budgets worldwide.
Earlier this year, Microsoft eliminated automatic volume-based discounts under Enterprise Agreements (EA), effective November 1, 2025. This move could increase IT budgets by up to 12%.
Now, Microsoft has announced a new round of price hikes that will go into effect in July across all Microsoft 365 and Office 365 plans, with increases as high as 33%. These changes impact organisations of all sizes, so proactive planning is essential.
What changed in November 2025: EA discount removal
- All customers now pay Level A list price, regardless of size
- Large enterprises could see up to 12% cost increases at renewal
What to do now:
- Review your current EA agreement to understand your exposure
- Audit usage and entitlements
- Explore CSP agreements to mitigate impact
What’s coming next: July 2026 global price hike
Microsoft announced a global price increase effective July 1, 2026, citing more than 1,100 new features added in the past year—including Copilot and advanced security tools. These adjustments affect various subscription tiers.
Why Microsoft is raising prices
SaaS vendors deliver continuous value through frequent feature releases, and Microsoft is no exception. Here’s what Microsoft cites as justification for the increase:
- Copilot integration: AI-powered productivity across Word, Excel, PowerPoint, Outlook and OneNote
- Security enhancements: Defender for Office P1 added to E3; URL checks for E1 and Business SKUs
- Management tools: Intune Remote Help, Advanced Analytics, Endpoint Privilege Management for E5
- Security Copilot: Embedded in Defender, Entra, Intune and Purview for advanced threat protection
According to Microsoft, the new changes reflect the company’s commitment to helping organisations protect people and data, streamline IT operations and embrace the future of work.
What this means for your budget—and what to do now
- Budget for both changes now
- Factor in Copilot add-on costs ($30/user/month)
- Align your procurement strategy with Microsoft’s push toward AI and security bundles
- Audit licenses and remove inactive users
- Explore CSP agreements or multi-year terms
- Prepare leadership for combined impact and negotiate early